published Friday, August 17th, 2012

TVA keeping rates down; CEO Tom Kilgore to retire

Tennessee Valley Authority headquarters and TVA logo
Tennessee Valley Authority headquarters and TVA logo
Miranda Harple
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TVA budgets

2013: $11.2 billion

2012: $12 billion

2011: $11.8 billion

2010: $10.8 billion

2009: $11.2 billion

2008: $10.4 billion

2007: $9.3 billion

Source: TVA

At the end of a TVA board meeting that began with more than 30 unhappy people complaining about tree cutting, nuclear costs, not enough energy efficiency and new recreation fees, the utility CEO Tom Kilgore quietly announced his resignation.

"I'm formally announcing today that I will retire soon. I gave them four to six months, with a preference for four months. I've enjoyed my time here," he said.

He made the announcement after hearing the board pass an $11.2 billion 2013 budget and no recommended rate increase. The new budget is the lowest since 2010.

It was something Kilgore has said he hopes will set the Tennessee Valley Authority back on track for having some of the lowest wholesale electric rates in the country. The utility now is nearer the middle of the pack in rates.

Kilgore also had heard the board praise his nuclear lieutenants who had reported slow but steady improvements to bring Watts Bar Unit 2's construction back on track as well as ramped up efforts to get Browns Ferry Nuclear Plant out from under NRC's highest "red" safety flag.

"It's been a challenging year," said Kilgore, who has become something of a lightning rod for TVA's struggles.

TVA board Chairman William Sansom praised Kilgore, who will turn 65 in March.

"Tom has caught the brunt" of some of this board's "inconsistencies," Sansom said, referring to TVA's random shoreline and marina fees and its previous off-and-on enforcement of its 15-year-old right-of-way easement policy.

Both issues, along with nuclear and energy efficiency concerns, have brought many residents to complain and even call for Kilgore's resignation over the past year.

Two of those calls came Thursday, in fact.

Don Safer, chairman of the Tennessee Environmental Council, told the board TVA needed new leadership.

"Mr. Kilgore, you're a very nice man, but I wish you would step aside," said Safer.

Kilgore just smiled.

The outlook

Kilgore said he will hold off turning his attention to his farm near Knoxville until TVA has chosen his successor.

Board members said they will consider internal candidates and launch a nationwide search for Kilgore's replacement.

In the meantime, TVA will begin the new fiscal year holding the line on electricity rates.

TVA's rate actions are usually passed on by the distributors to residential and commercial customers in Tennessee and parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia.

Last year the board raised rates by 2 percent and it also made pricing adjustments during the year for fluctuating fuel costs.

TVA was able to keep rates steady in spite of losing $290 million in the first three quarters of the fiscal year. The loss was the result of the mildest winter in decades that kept customers from using as much electricity as normal. A heat wave in the summer that caused a record demand for electricity still helped little, officials said.

TVA was able to offset some of the losses after implementing a cost-cutting program earlier this year that called for the elimination of 1,000 positions in addition to delaying some capital projects.

Kilgore has been with TVA since 2005, and his compensation last year totaled $3.95 million.

Also at the board meeting, TVA officials said that the Unit 2 reactor at the Watts Bar Nuclear Plant in Spring City, Tenn., is still on schedule to be completed in December 2015. The project is up to $2 billion over budget and several years behind schedule.

More than 30 citizens spoke to the board before the meeting, many of them concerned about TVA contractors cutting down trees in residential neighborhoods. A few complained about trees well below power lines that had been cut down.

Kilgore said he would look at ways to improve the tree-cutting program, but said trees have to be monitored because they can cause widespread power outages when they touch transmission lines.

"We've had instances in this country where a single tree contact caused millions of people to be out of service, so our real reason is not to be mean or ugly or anything like that," Kilgore said. "It's just to do our job -- to keep the electricity on."

The Associated Press contributed to this story.

about Pam Sohn...

Pam Sohn has been reporting or editing Chattanooga news for 25 years. A Walden’s Ridge native, she began her journalism career with a 10-year stint at the Anniston (Ala.) Star. She came to the Chattanooga Times Free Press in 1999 after working at the Chattanooga Times for 14 years. She has been a city editor, Sunday editor, wire editor, projects team leader and assistant lifestyle editor. As a reporter, she also has covered the police, ...

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